KB Home (NYSE:KBH) posted second-quarter earnings that surpassed analyst expectations, yet its shares dipped slightly in early trading on Tuesday after the company trimmed its full-year guidance.
For the quarter ending May 31, 2025, the homebuilder reported earnings per share of $1.50, edging past the consensus estimate of $1.46. Revenue totaled $1.53 billion, matching forecasts but marking a 10.5% decline compared to $1.71 billion a year earlier.
Deliveries for the quarter reached 3,120 homes, down 11% from the prior year. The average selling price ticked up modestly to $488,700.
“Our second-quarter results were strong, staying within or above our forecasted ranges as we continue to manage through a challenging market,” said Jeffrey Mezger, Chairman and CEO.
Looking ahead, KB Home now expects full-year 2025 revenue between $6.3 billion and $6.5 billion, a downward revision from the previous range of $6.6 billion to $7 billion issued in March. Analysts polled by FactSet project revenues of about $6.55 billion for the year.
The company also narrowed its forecast for average selling prices, adjusting the expected range to $480,000–$490,000 from $480,000–$495,000 previously. This update reflects ongoing buyer caution amid high mortgage rates and elevated home prices.
“Consumer confidence remains fragile in the near term, influencing purchasing decisions,” Mezger noted during a call with analysts, citing persistent affordability challenges along with broader economic and geopolitical uncertainties.
Analysts at Evercore ISI commented that expectations entering the quarter had already been conservative due to worsening market conditions since late March guidance. “Therefore, the company’s revised outlook for fiscal 2025 is not particularly alarming, although investors may remain cautious about the anticipated rebound in the fourth quarter,” they said.
Net orders fell 13% year over year to 3,460 units, while cancellation rates increased to 16% from 13% the previous year, signaling softer demand.
During the quarter, KB Home repurchased $200 million of its common stock at an average price near $54 per share, and plans to continue buybacks throughout the remainder of fiscal 2025.